Environmental Benefits

Solar America Initiative:

Energy, Economic, and Environmental Benefits

NREL/SR-640-41998 August 2007

Solar America Initiative PV installation goals will result in a wide range of significant benefits:

The SAI is expected to produce significant economic benefits over and above what would be achieved in the counterfactual scenario where the SAI generation is instead supplied by conventional sources. If the 2015 SAI goals are reached, economic output will have a net increase of $2.9 to 9.1 billion and 16,000 to 45,000 new jobs will be created. By 2030, the SAI results in an increase of $25 billion in economic output and 165,000 to 199,000 new jobs.

The economic benefits assume that the price of electricity remains constant (except for inflation) throughout the analysis period. Most predictions indicate the price of electricity will increase, however, particularly for electricity generated by natural gas, which is the most likely source to be offset by the SAI. When price increases are considered in the analysis, a 1-cent increase in electricity prices will increase the net economic output from PV O&M by 3 percent. Similarly, every 1-cent increase in electricity prices will also increase the PV O&M personal income benefit by 6 to7 percent and the net number of new jobs by 8 to 9 percent annually.

The SAI PV installations will also have a significant effect in reducing emissions. If the 2015 SAI goals are met, emissions of CO2 will decrease by 5 to 11 million tons annually, NOX emissions will decrease by 5,000 to 11,200 tons annually, and SO2 emissions will fall by 9,200 to 20,700 tons annually. By 2030, the SAI will result in decreased CO2 emissions of 69 to 100 million tons annually, decreased NOX emissions by 68,000 to 99,000 tons annually, and decreased SO2 emissions by 126,000 to 184,000 tons annually. These emissions reductions will continue each year the PV equipment remains installed.

The reduced emissions will have a corresponding influence on health benefits in addition to reductions in global warming and acid rain. In 2015, the reduced emissions should result in a decrease in mortality of 22 to 49, with this number increasing to 300 to 437 deaths avoided annually by 2030. The improved health benefits due to the SAI is also expected to reduce the lost number of work days, with lost work days falling by 2,500 to 5,700 annually in 2015 and decreasing 35,000 to 51,000 annually in 2030.

Increasing the deployment of PV through the SAI will reduce demands on natural gas, which in turn will reduce the price of natural gas. If the inverse price elasticity of 1.4 is used, then the SAI PV installations will have the effect of reducing natural gas prices by 0.3 to 0.6 percent in 2015 and 3 to 6 percent in 2030. This has potentially far reaching effects, as even a small reduction in the price of natural gas will be felt by all customers that rely on natural gas for electricity generation.

Finally, several studies have researched the potential benefits of using PV and other distributed energy resources to reduce the risk of blackouts. Large regional blackouts are expensive and disruptive to the economy and have been estimated to cost the U.S. $100 billion annually. Research suggests that 500 MW of PV may have been enough to avoid this blackout. The ability of PV to prevent specific blackouts will depend on very specific information on where the PV installations are installed and their ability to relieve pressure on the high stress points on the grid. While this level of detail is outside the scope of this study, it appears that there will be some potential benefit for blackout prevention should the SAI PV goals be achieved.